With health care costs on the rise, reimbursements on the decline and the popularity of propofol driving the demand for anesthesiology specialists in the endoscopy suite, collaboration between endoscopists and anesthesia providers is emerging as a possible way to satisfy all parties.

The use of anesthesia providers—anesthesiologists and certified registered nurse anesthetists (CRNAs)—by endoscopists has been growing steadily over the past decade. Today, 35% to 50% of endoscopic procedures in the United States are performed with an anesthesia provider. At the same time, reimbursement rates for endoscopic procedures and facility fees have declined. These two changes have driven endoscopists to consider other ways to generate revenue and have spurred the development of an industry to help them do so.

“The basic thing that has caused all of this to be an active discussion in the gastroenterology community is the issue of cost,” said Robert Blake, chief executive officer, Innovative Anesthesia Management, LLC. “The theory is to provide colonoscopies and other gastrointestinal endoscopies for the diagnosis and treatment of conditions, therapeutically or diagnostically, at the lowest possible cost with the highest quality of care.”

Mr. Blake credits gastroenterologists for saving the health care system significant dollars through the years by opening and operating ambulatory surgery centers (ASCs) and office-based facilities to perform outpatient gastrointestinal endoscopy.

“Despite the added cost of anesthesia professional services to gastrointestinal endoscopy professional and facility costs outside the hospital setting, gastroenterologists have produced significant savings for the health care system over the past 30 years. Not only has the actual endoscopic procedure advanced technologically over this period, so has the delivery of anesthesia,” he said. “By offering patients the informed choice or option of using anesthesia professionals, gastroenterologists have provided patients with an additional benefit.”

Compared with hospital outpatient settings, physician-owned endoscopy centers are very cost effective. But endoscopists’ revenue from professional and facility fees in these settings can be vulnerable. One of the ways for ASC- or office-based endoscopists to generate additional income is to profit from the anesthesia providers on whose services they are increasingly dependent.

“Traditionally, gastroenterologists and urologists [used] CRNAs to perform anesthesia services on their behalf, but the CRNAs billed directly for their services and none of that income was shared,” explained Steve Schuster, general counsel for Innovative Anesthesia Management, LLC. Recently, however, several business models have evolved that allow endoscopists to profit from the presence of an anesthesia provider. Complexity and legitimacy of the models vary, and any endoscopist who wishes to set up a business that allows for some capture of anesthesiology-driven services is well advised to be familiar with federal and state laws and guidelines.

Fee-for-Service Model: Billing the Anesthesiologist

Originally, in the fee-for-service model, the anesthesia provider conducted a service, billed for the service and collected his or her fee.

“But endoscopists began to realize that the revenue generated from the anesthesia practice is often higher than the reimbursement paid to the endoscopist,” said Lawrence B. Cohen, MD, associate professor of medicine, Mount Sinai School of Medicine, New York City. “There is a disproportionate reimbursement for the anesthesia piece compared to the endoscopy.”

Pondering how they could capture some of that income, endoscopists determined that it was not out of the question to charge the anesthesia provider a fee for rental of space and for leasing and/or storing equipment.

“That model is an extension of the fee-for-service model—the anesthesia provider would be paying a certain amount of money per month.”

That remains a fairly popular model for several reasons, Dr. Cohen said. It’s an easy model to implement if you already have an anesthesiologist working with you. Also, it is a legitimate model legally, as long as federal guidelines—anti-kickback laws and safe harbor rules—are followed.

“That is a very rudimentary joint venture model, so that the endoscopist can share in the anesthesia income,” Mr. Schuster explained, noting that the differential between endoscopists’ and anesthesia providers’ reimbursements may be steeper in New York—and in Dr. Cohen’s experience—than it is in other parts of the country.

However, in some parts of the country, this model may be problematic, Mr. Schuster said.

“The fee-for-service model happens in Virginia, and it happens in New York, but I don’t think that any joint venture between gastroenterologists and anesthesiologists can work easily and still comply with the law,” Mr. Schuster said. Florida, for example, has a fraud and abuse law even more stringent than the federal law.

Group Practice Model: Hiring the Anesthesiologist

Another model that evolved early on is the group practice model, prevalent in New York State, whereby the anesthesia provider is either an employee of the group practice or an independent contractor.

“This was sort of a modification of the fee-for-service model,” Dr. Cohen said. In this scenario, however, the endoscopy practice bills for the anesthesia services, pays the anesthesia provider a salary or fee according to an agreed-on compensation formula, and keeps the difference.

“There are certain laws and stipulations as to how that can work, but as long as you’re paying the anesthesiologist a fair wage calculated on work performed, rather than a percentage of the revenue, the group practice model is a legitimate business model,” Dr. Cohen said.

Mr. Schuster concurred. “There are a lot of complex laws—corporate practice of medicine laws and fee-splitting prohibitions. But as long as the anesthesiologist is part of the group practice and the professional fees are billed by the group practice, that is a perfectly legitimate model.”

The legality of a variation of the group practice model, the “in-house” model, whereby the anesthesia provider is an employee of the endoscopy facility rather than the endoscopy practice and revenue generated by the anesthesia provider goes to the owner of the facility, is a little less clear.

“The in-house variation is going to be tough for a variety of reasons because the corporate practice of medicine laws vary from state to state,” Mr. Schuster said. “In some states this model works, in others it doesn’t. Offhand, it wouldn’t work in California because of their stringent corporate practice of medicine laws.”

Furthermore, an ASC has no right to bill a professional fee.

“The anesthesiologist in that case would have to bill under his own number and assign his fees to the corporate entity,” Mr. Schuster explained. “That could run into legal problems.”

Company Model: A Legal Entity Employs the Anesthesiologist

In the increasingly popular company model, the anesthesiologist or CRNA works for an independent company, often owned by the endoscopist, although it could be owned by anyone. This model requires the services of a lawyer to create a legal entity (i.e., the LLC or partnership). It can take up to a few thousand dollars and up to 90 days to establish a new corporate entity. And it can take up to six months to obtain a Medicare number.

“The gastroenterologist sets up a professional corporation that obtains its own Medicare number and thereby becomes a provider of professional medical services—providing anesthesia to those patients who request it,” Mr. Schuster explained.

The entity hires or contracts with anesthesiologists or CRNAs, depending on the desire of the endoscopists. “Most do not want anesthesiologists because they cost almost double what a CRNA costs,” Mr. Schuster said.

The anesthesia services provider is paid their contracted rate or salary, “and whatever is left over in terms of profit is split by the owners, who are the gastroenterologists,” Mr. Schuster said.

The company model does require a fairly significant investment of both time and money up front. “You need a name and you need to apply for a Medicare provider number and provider numbers for the insurance companies those providers will participate in,” Dr. Cohen said. “It takes financial investment, because you’re paying the anesthesiologist [or CRNA] for several months before you start receiving checks from the payers.”

The benefit to this model, Dr. Cohen explained, is that it separates billing for endoscopy services from billing for anesthesia services, which is done using different tax identification numbers for the gastroenterology practice and the anesthesia company.

“[The payers] really have no way of knowing whether the anesthesia company is wholly owned and operated by anesthesia providers or endoscopists. Potentially, this could be helpful when it comes time to negotiate endoscopy and facility fees with the payers,” Dr. Cohen said.

Whether the endoscopist renegotiates fees with the payers or not—some will, in fact, charge less than a payer would accept in order to provide a responsible cost to the patient rather than maximize their own reimbursement—the company model allows endoscopists to capture anesthesia income as a separate line of business. This creates another source of revenue, along with professional fees, facility fees and laboratory income. Unlike the first two sources of income however, which have fallen over time, income generated by anesthesia services may prove fairly reliable.

“Professional fees are always being reduced because when it comes to saving money in the health care system, you just lower physicians’ fees, which has happened to gastroenterologists at least twice,” Mr. Schuster said.

To generate income through the collection of facility fees, many endoscopists invested in ASCs only to see that source of income diminished as well. “That reimbursement was cut radically last over the past few years, especially by Medicare,” Mr. Schuster said. “Having this anesthesia piece allows them to balance their income.”

All this income-generating behavior may seem antithetical to the spirit of reducing health care costs, but an important element to consider is that physician-owned endoscopy centers are much more cost effective than hospital outpatient centers.

“If you could pull every gastrointestinal endoscopy [unit] out of hospitals and into the physician-run centers, the inspector general of the United States has estimated you would save the U.S. taxpayer about $232 million per year,” Mr. Schuster said, drawing from a 2003 report and guessing that number would be higher today.

“So gastroenterologists aren’t feeling terribly guilty about the small additional cost for anesthesia in light of its total impact on the health care system,” Mr. Schuster said. “That’s why the company model has become a very popular way to do things—based on what I’ve seen, heard and absorbed over the past year, the most popular model.”

Anesthesia Services Company: Outsourcing the Anesthesia Provider

For endoscopists who would prefer not to deal with the hassle of employing or contracting anesthesia providers, contracting with third-party providers and billing for anesthesia—all the work entailed in establishing an anesthesia company—there is another option: Leave it up to somebody else.

“This is an option I don’t think a lot of people are aware of,” Dr. Cohen said. “There are any number of companies now that provide a turnkey operation for an endoscopist—basically outsourcing all the things that if you employ the anesthesia provider or use the company model, you would have to do yourself.”

In this model, an outside company does the recruitment of anesthesia service providers—contract negotiation, credentialing and possibly payer negotiation—and sets up the endoscopist with an anesthesia provider in return for a percentage of revenue generated. Another portion of revenue goes to the anesthesia provider, and the balance goes to the endoscopy group.

The outside company also does the billing for anesthesiology services.

“Billing for anesthesia is very different from billing for gastroenterology services, and many groups don’t have the infrastructure to do anesthesia billing,” Dr. Cohen said.

“The anesthesia services company hires the CRNAs, staffs the facility, supervises the CRNAs, coordinates interactions between the CRNA and the doctor, and keeps the anesthesia record,” Mr. Schuster explained. “There are a lot of folks who have their own CRNAs now who are converting to this model with their current CRNAs. The CRNAs are very unhappy, but sooner or later everybody in the health care business has to adapt to a different landscape.”

What’s In It for the Anesthesiologist?

Which begs the question: What’s in it for anesthesia providers to take part in any of these models?

“The average CRNA in this country earns more than the average pediatrician or family care practitioner,” Mr. Schuster said. “In the company model, the in-house group model and the group practice model, the CRNA makes about the same. It’s the fee-for-service model where the CRNA can make considerably more if they’re very productive. CRNAs are paid very well.”

Mr. Schuster added that CRNAs cost considerably less than alternatives, but have skill sets and professional abilities substantially similar to anesthesiologists.

Money, of course, is rarely the only consideration for any professional.

“In our experience in the gastroenterology field, most CRNAs are employed by hospitals,” Mr. Schuster said. They have call and weekend hours, and their schedules can be unpredictable and demanding. “The gastrointestinal endoscopy centers, however, generally run five days a week, eight- to 10-hour days. In the gastroenterology model, CRNAs are often wiling to make less for a fairly stable, everyday life. No call, no emergencies, daytime hours and all the reasons a lot of us like to have stable and steady work.”

ethernaut

12-22-2010, 07:32 PM

i mentioned to the chief GE proceduralist that the sedasys was considered to be approved, and we had a little discussion about it. seems that the consensus seems to be that why can't nurses give sedation propofol. my staunch argument was that anybody can be "trained" to give meds for sedation, etc... but, you just can't be trained to handle airways by looking at pictures and handling mannequins. i don't think it's gonna make it to my facility. if it does, i'll eat my words, and other things not specified right now.

RAYMAN

12-23-2010, 05:47 AM

I was in the GI lab a coupla days ago. The last pt, EGD/colon, was a 5' 300# ASA 4 beauty with no neck. You name it and she had it except ESRD. Good luck getting a machine manage that. Went fine.

jwk

12-23-2010, 06:14 AM

I was in the GI lab a coupla days ago. The last pt, EGD/colon, was a 5' 300# ASA 4 beauty with no neck. You name it and she had it except ESRD. Good luck getting a machine manage that. Went fine.

Clearly you haven't read the unbiased GI studies that says they've done 74.5 million patients up to ASA 8 using Sedasys without a single fatality or as much as an unexpected hangnail.

SuccsDrugs&Rocuron

12-23-2010, 06:32 AM

Clearly you haven't read the unbiased GI studies that says they've done 74.5 million patients up to ASA 8 using Sedasys without a single fatality or as much as an unexpected hangnail.
'morning jwk (nice thread), what's an ASA 8? just looked up in M&M pg. 10:

My first thought was that the endoscopists are reaching into the anesthetist's pocket by inventing a charge for 'renting space'. I'm still not entirely accepting of this idea, after all---we do the anesthesia, we get paid for the anesthesia. On the other side, the endoscopist does have to rent the facility or pay for it if (s)he built it themselves so I can see them recouping some of that cost. Interesting idea...I just don't like it.

Anthony

12-23-2010, 01:42 PM

Besides anesthsia charges, there are facility fees and supply (single use and pharm) that are other seperate charges the center can recoup cost. For example, if our group had purchased our sonosite, we could have leased it to the hospital or charge for it's use. Stupid us, opted not to buy it...it paid for itself within 6 months....